Eastern Asia Technology Ltd: The Audio Masters
April 24, 2001
Website - www.kayhian.com
Eastern Asia Technology Ltd [SI.E08] (S$0.73)
Recommendation: BUY
Since we initiated coverage on 6 Dec 00, Eastern Asia Technology's (Eastech) share price has outperformed the market, rising 22%. We maintain our BUY recommendation and raise our price target to S$1.06.
Growth drivers intact. We are looking for another strong year of growth. Eastech's 3 growth drivers will be new products (e.g. MP3 player, home karaoke), new customers (deeper penetration of the Japanese market) and ramp from new capacity (new Hungary plant and more lines in China). Forecast growth is >50% in FY01.
Still the undisputed leader in OEM/ODM audio. Speaker and audio electronic products grow by 2-5% each year. Eastech has managed to outpace industry growth through continued outsourcing by OEMs, its unique integrated production facilities and global footprint of factories in low cost countries. Almost 90% of its business comes from repeat customers such as Sony [SNE], Philips [PHG], Kenwood, RCA and JBL.
Price target. Because Eastech is involved in various audio segments, it is difficult to find direct comparisons. Nevertheless, benchmarking Eastech's individual divisions to their counterparts in the industry, our fair value for the stock is S$1.06
stockhouse.com.sg  |
